World energy crisis...
the Venezuelan context

By Franz J.T. Lee

12-09-04
University of Los Andes (ULA) professor Franz J. T. Lee writes: Do we
really have a "World Energy Crisis"? Is there a global, historical
connection between this "crisis" and the dramatic social events in
Venezuela?
And why is Latin America a revolutionary time-bomb?

Already
on June 12, 2000, in an article: "The Unnecessary Energy Crisis: How to
Solve It Quickly", T.E. Bearden, LTC, US Army (Retired) CEO, CTEC, the
Director of the Association of Distinguished American Scientists (ADAS)
and a Fellow Emeritus of the Alpha Foundation's Institute for Advanced
Study (AIAS), explained the energetic quintessence of the current world
recession, depression and crisis.
In the last analysis, within
this "crisis," the current problems of Venezuela, the war on
Afghanistan and Iraq, the imperialist policies of Russia vis-a-vis the
Balkan peoples, the counter-revolutionary roles of Israel in the Middle
East and of South Africa on the African continent, have to be seen.

Firstly,
avery careful historical politico-economic study of the revolutionary
processes of the accumulation of world capital, of the various modes of
production on the planet, will reveal that all the well-known,
dramatic, dialectical, intra-systemic changes that have occurred,
basically concern the radical transformations of energy and
technological sources and resources.
This applies to all
productive processes, from the stone-axe to the computer, from the use
of man-power to horse-power, to Pentagon "Aliens", to United States
"Flying Saucers", leaving Los Alamos, driven on by Tesla energy and
technology, already discovered and partially probably used since the
end of the 19th Century.

Historically,
as intrinsic part of the even, uneven and combined development, slave
labour clashed with agricultural manual labour, the latter survived,
then, later, as a result of the "Emancipation of the Slaves" and the
"Industrial Revolution", both were superseded predominantly by
industrial production, by modern factory
labour.
The British textile industry necessitated wool, thus
sheep drove the peasants off their ancestral lands, food production
diminished, vagrant laws eliminated the unemployed serfs, that is,
progressively destroyed the obsolete agricultural energetic resources.

Nowadays,
as a result of a "Global Revolution," 6 bn already obsolete manual
industrial and agricultural labourers, as forces of production, as
energetic forces, are continually being eliminated from the global
market.
So-called "intellectual labour," "intellectual property,"
"human capital" or "global social and natural resources of mankind"...
for example, Amazonia... not only usher in the current fascist stage of
a mode of global destruction, but also of a still possible
post-productive mode of creativity and creation, thus, also nurturing
already existent, alternative, energetic sources and resources, that
could give birth to trans-revolutionary possibilities and emancipatory
realities.

This
is
the trans-historic background in
which the current Bolivarian Revolution has to be placed, be seen, as
part of the tip of the emancipatory, creative iceberg -- for it, for
the impoverished millions of Latin America, to be anything else, surely
would mean, regression, stagnation, vegetation, reform,
self-annihilation.
Venezuela,
as one of the main suppliers of the "long term" already obsolete
energetic resources of oil and gas, is directly affected by current
"new wars" by the EURO-US "world mode of destruction"; hence, let us
summarize what an expert in this matter, Thomas Bearden warned about...
that is, in how far the global "energy crisis" affects Venezuela and
Latin America, and why the permanent, ferocious, global, globalised
attacks against the Bolivarian Revolution.

Already
in 2000, what did Bearden tell us with reference to the current "world
energy crisis"?
"The
world energy crisis is now driving the economies of the world nations.
Presently there is an escalating worldwide demand for electrical power
and transportation,
much of which depends on fossil fuels and particularly oil or oil
products. The resulting demand for oil is expected to increase year by
year. Recent sharp rises in some US metropolitan areas included
gasoline at more than $ 2.50 per gallon already.”
“At
the same time, it appears that world availability of oil may have
peaked in early 2000, if one factors in the suspected Arab inflation of
reported oil reserves. From now on it appears that oil availability
will steadily decline, slowly at first but then at an increasing pace."

Concerning
the
"some 150 nations," mainly of South America, Africa and Asia, who live
outside the big metropolitan countries, he explained their immediate
future:
"The transfer of manufacturing and production to many of
these nations is a transfer to essentially "slave labour" nations where
workers have few if any benefits, are paid extremely low wages, work
long hours, and have no unions or bargaining rights. The local
politicians can usually be "bought" very cheaply so thatthere are also
no effective government controls. This has set up a de facto return to
the feudalistic capitalism of an earlier era when enormous profits
could be and were extracted from the backs of impoverished workers, and
government checks and balances were nil."

Very
accurately he foresaw the current collapse of the global economy:
"Bluntly,
we foresee these factors -­ and others not covered -­
converging to a
catastrophic collapse of the world economy in about eight years. As the
collapse of the Western economies nears, one may expect catastrophic
stress on the 160 developing nations as the developed nations are
forced to dramatically curtail orders."
Thus, how do the desperate
actions of blowing up "Twin Towers" and declaring "new wars" on
Afghanistan and Iraq, including oil sabotage in Venezuela, fit into
this gruesome picture?

And,
who all are more desperate?
Surely, less North Korea or Iran, but in the first place, certainly,
the United States Administration, Bush-Kerry, Corporate
America, but also the "opposition" in Venezuela, Carter, Gaviria and
Gustavo Cisneros.
"History
bears out that desperate nations take desperate actions. Prior to the
final economic collapse, the stress on nations will have increased the
intensity and number of their conflicts, to the point where the
arsenals of weapons of mass destruction (WMD) now possessed by some 25
nations, are almost certain to be released. As an example, suppose a
starving North Korea launches nuclear weapons upon Japan and South
Korea, including US forces there, in a spasmodic suicidal response."

Below,
he explained the capitalist, corporate, energetic reasons for the
establishment of the current "Fourth Empire" and why the issues at
stake are so urgent for the survival of the current "world order" for
"world peace." In other words, he indicated why Iraq and Afghanistan
need "regime change," why Iran and Venezuela are next on the list, and
why President Chavez' "understanding of democracy" is "out-dated."
"The
resulting
great Armageddon will destroy civilization as we know it, and perhaps
most of the biosphere, at least for many decades. My personal estimate
is that... beginning about 2007... on our present energy course we will
have reached an 80 % probability of this 'final destruction of
civilization itself' scenario occurring at any time, with the
probability slowly increasing as time passes. One may argue about the
timing, slide the dates a year or two, etc., but the basic premise and
general time frame holds. We face not only a world economic crisis, but
also a world destruction crisis."

Well,
we have passed the critical year, 2003, the following await us:
"The
2003 date appears to be the critical ‘point of no return’ for the
survival of civilization as we have known it. Reaching that point, say,
in 2005 will not solve the crisis in time, and the collapse of the
world economy as well as the destruction of civilization and the
biosphere will still almost certainly occur, even with the solutions in
hand....
Eerily, this very threat now looms in our not too distant future, due
in large part to the increasing and unbearable stresses that escalating
oil prices will elicit. So about seven years or so from now, we will
enter the period of the threat of the Final Armageddon, unless we do
something very, very quickly now, to totally and permanently solve the
present ‘electrical energy from oil crisis.’"

Of
course, Thomas Bearden is not a socialist, he wants the best for
Corporate America. Thus, according to him, what is required to solve
the problem? Venezuela, listen very carefully to what he said.
"To
avoid the impending collapse of the world economy and/or the
destruction of civilization and the biosphere, we must quickly replace
much of the "electrical energy from oil" heart of the crisis at great
speed, and simultaneously replace a significant part of the
"transportation using oil products" factor also.... In the name of all
humanity, let us begin! Else by the time this first decade of the new
millennium
ends, much of humanity may not remain to see the second decade."

Other
solutions that he has suggested, could be read in the document referred
to above, however, according to him, it is now already too late. No
real measure was taken to avoid a global catastrophe. In any event it
is important to see the real, true, historic context of the current
Bolivarian Revolution; surely, the solution of problems is to be found
neither in "away with Chavez" nor in "away with the Opposition."
Precisely
this global situation has produced the Bolivarian Revolution, it is its
alma mater, its emancipatory matrix. We have to solve our immediate
short term problems, but even they are dictated by trans-historic long
term processes and developments. We have to arm ourselves, practically,
militarily, theoretically, philosophically, and creatively, that is, in
toto, we have to enter the horizons of invisible, invincible,
invulnerable, emancipatory spheres.

University of Los
Andes (ULA) professor Franz J. T. Lee writes:
The latest terrorist, political gimmick of the USA against Venezuela
... even threatening to block access to international loans with a de
facto
veto in international lending institutions ... is to accuse Venezuela
of participating in "human trafficking" ... in other words, that
Venezuela is promoting modern global slavery ... more precisely, is
nurturing "forced human labor."

In the 2nd
US Annual Trafficking in
Persons Report, the US Department of State itself had explained a while
ago what Venezuela is being accused of.

Well, the Chavez
Frias government has absolutely nothing
to do with the above ... it is too much occupied with the integration
of Latin America against the Free Trade of the Americas Agreement
(ALCA) and the CIA ... Chavez Frias is organizing popular "missions" to
provide education, health, housing and food for the nation.

In spite of such
"urgent preoccupations" of the
White House, at least Secretary of State Colin Powell had the objective
decency to report the following about the Euro-US Mafiosi which is very
much occupied with global human trafficking:

Surely, sexual and
labor exploitation are
against the law in the United States? Also US Federal laws
prohibit
slavery, also in prisons. However, it seems, that under the US
Trafficking Victims Protection Act and other similar laws in Europe,
that Bush, Schroeder and Chirac have no measures available to mete out
punishment or sanctions against their very own slave masters.

For sure, according
to the US Amendment XIII:

Section 1.
Neither slavery nor involuntary servitude, except as a punishment for
crime whereof the party shall have been duly convicted, shall exist
within the United States, or any place subject to their jurisdiction.

Yet, in reality,
according to reports, in the
USA, ten of thousands of prisoners ... especially Afro-Americans ...
are being enslaved by forced labor. Very few people have read serious
investigations about these forms of modern slavery, for example, the
report, HIDDEN SLAVES, Forced Labor in the USA.

These
documents show how Slave
Labor is an easy source for US Corporate and Government profits. One
article touches the very core of the issue:

In conclusion, the
truth of the matter is that,
apart from the universal, politico-economic fact, the USA is itself
exploiting billions of physical and mental labor forces en masse ... by
prostituting them, buying their very bodies and souls cheaply, northern
corporate imperialism still has the arrogant audacity. Especially
after its lies about Pearl Harbor, the Twin Towers and its preventive
Invasion of Iraq ... now by means of bare-faced international
info-war, to disseminate more blatant hoaxes across the globe, lies
about Venezuela and its revolutionary government.

Concerning human
trafficking/modern slavery ...
by secretly tolerating them or even organizing them; and by forcing
young men into genocidal economic world wars, the very USA and Europe
are in the front line of such heinous crimes against humanity. In
reality, they should be at The Hague or in Nuremberg trials to be
judged for heinous crimes against the very species homo sapiens,
against all life on the planet.

However, as always
... if not Chavez Frias, the "bad guys" are the Arabs.

According to a 1993
US State Department
estimate, about 90,000 blacks were supposedly owned as slaves by North
African Arabs who, in a thriving slave trade, were selling them for as
little as US$15 per human being.

Even worse, UNICEF
estimates that 200,000 children from West and Central Africa are being
sold into slavery each year.

In the eastside Caracas barrio
of Petare, an elderly former guerrilla addresses his neighbours: “In
the 1960s and 70s when we were fighting the government,” notes Renardo
Tovar, “we had to create our own media of communication: clandestine
newspapers, radio, barrio-newsletters. Now that we are
part of
the process and supported by the process, we have lost our
creativity.
We depend on existing media—Ultimas Noticias, Radio Nacional,
Canal 8[1]—when the need is still great to create our
own.”

Looking-in
from the barrios that surround Venezuela’s
capital.Credit: Jonah Gindin

An infamous epicentre of rebellion
and politicization, Petare residents played a leading role in the caracazo—the
popular uprising against the neoliberal policies of then President
Carlos Andres Perez in February 1989. On April 12th, 2002, hours
after
a coup had (temporarily) toppled Venezuelan President Hugo
Chávez’
government, Petare residents stormed the state television station,
bringing it back on the air to inform the country of the coup, rallying
Chávez’ supporters to successfully demand his return.

Renardo Tovar is participating in a
‘popular assembly’, bringing
community activists and social movement militants together to debate
the ‘deepening of the revolution.’ Since Chávez’
declaration that the
referendum victory inaugurates a new stage in the Bolívarian
project,
communities across the country have begun debating what the “revolution
within the revolution” actually means.

After a year and a half thaw,
popular power is once again
stimulating popular consciousness in Venezuela. Since the
campaign for
recalling Chávez got under-way after the failed oil lock-out of
2002-03
the opposition shifted strategy from extra-legal attacks on
Chávez (the
2002 coup, the lockout) to legal ones (the referendum). But with
their
defeat last August, the immediate threat to the Bolivarian revolution
has—temporarily—been averted. As a result, Venezuela’s revolution
has
entered a new stage. Chávez calls it ‘deepening the
revolution,’ but
it is more than just his initiatives for ‘deepening’ at the level of
the state. This new stage is characterized by a dialectical shift
from
the defensive politics that subordinated everything else to the defence
of the revolution, to a return to the creative dialogue that
Chávez’ proceso initially represented.

At this moment, as the splintered
collection of anti-chavists
represented by the Democratic Coordinator (CD)—unable to come to grips
with their defeat—continues their self-immolation, dialogue and dissent
have returned to debates within chavismo. The collective
imagination that has been largely stagnant since the 2002
attempted-coup is once again finding spaces for expression. It is
a
moment for ‘deepening’, but it is also a moment for reflection, and for
self-criticism.

Between a Friend and a Principle

With the upcoming regional elections
as a further catalyst,
communities are once-again demanding national forums for the
articulation of community interests, and community-based
struggles.
Thus, a series of popular assemblies held in communities across the
country to frame their position with respect to the regional elections:
local-selected candidates (primaries) or conditional support for
candidates selected from above? And thus a lively debate that is
slowly emerging on the future of the Electoral Battle Units (UBEs)
initially created as part of the chavista referendum campaign.

Outside
Miraflores Palace, a small group of Chavistas
demand primaries to chose candidates for the upcoming regional
elections.Credit: Jonah Gindin

In response to increasing
mobilization demanding primaries for
regional candidates, Chávez’ position has been a surprise to
many.
Last month, he declared “We have already announced the candidates, and
these are the candidates. Those who don’t want unity can join the
escualidos
(opposition).” Yet since these candidates were all appointed by a
national committee dominated by the governing party, the 5th Republic
Movement (MVR), the result has been fierce opposition in many
communities who are demanding that the government act in accordance
with its participatory rhetoric.

While many in the interior continue
to press for primaries, Caracas
seems to have come to a consensus. Recognizing the time
constraints
with the October 31st date of the regional elections looming, three of
Caracas largest working-class districts have chosen conditions over
primaries.

Yet the anger that this
contradiction in the governments position
has sparked remains. As the April 13th Movement, spawned during
the
mobilization on April 13th 2002 that resulted in the reversal of the
coup against Chávez, argues: “We either make revolution, or we
face
destruction by the counterrevolution…this is the ethical dilemma cited
by Chávez when he makes us chose between a friend and a
principal.”

Rhetoric and Practice: Local
Autonomy, Community-based Power

In a series of independently
organized popular assemblies held in
the Caracas barrios of El Valle, Petare, and Catia the focus was on
declaring publicly and collectively the changes that they expect to see
after chavista victory in their states and municipalities, no matter
the candidate. To this end community members participating in the
popular assemblies drew up manifestos that were subsequently sent to
candidates at the municipal and state levels, and to Chávez.

In a manifesto published by various
independent media outlets via
internet, the Left Revolutionary Option (OIR) declared: whoever the
candidates are, “the upcoming regional elections cannot be a new
electoral event, nor a media-show without content or political
perspectives…On the contrary, they must be a continuation of the
struggle against imperialism and against the Venezuelan
oligarchy.
They must be an opportunity to debate ideas, suggestions, programs, and
concrete plans of action that provide answers to the most urgent needs
of the workers and the people.”

Manifestos drafted by these popular
assemblies include provisions
for the improvement of a diverse range of community rights and
services. One focus for all three assemblies was the idea of
local
public planning councils. Last spring the organic law of Local
Public
Planning Councils was passed, yet these potentially key institutions of
participatory democracy so close to the heart of the Bolivarian project
have yet to be implemented.

Subordinated to facing the direct
threat to the revolution that the
referendum represented, the local public planning councils have
returned to the forefront of the debate in many communities. They
represent a Venezuelan version of the participatory budget experimented
with in Porto Alegre, Brazil. According to Conexion-Social
(Social-Connection), a nation-wide forum for community activists and
social movements, the public planning council law is plagued by
difficulties. Yet their implementation is the first step in
addressing
and eventually rectifying these potential problems.

As Pedro Infante, director of the
National Coordination of Popular
Organizations points out, the law was changed before being passed in
the National Assembly. “Deputies to the National Assembly often
do not
consult their base on the laws they pass. But we as organized
communities are not pressuring them sufficiently to do so. We are
organized, but we are dispersed.”

Last weekend in 23 de Jenero[2],
another vibrant center of revolutionary activity, neighbours and
activists held a ‘popular assembly’ with the express aim of defining
their community’s autonomy. Not content to wait for the national
government to fix the existing legislation for local power structures,
community-members took the initiative and explicitly stated the need
for the creation of a self-sufficient local governing body inexorably
rooted in, and directly accessible and accountable to, the community.

Small Steps: Internal Limits and
Contradictions

Despite the continuing—and in fact
increased—dynamism of Venezuela’s
experiment in revolution, the process remains a gradual one, and it is
one plagued by difficulties stemming from within as well as
without.
Whatever the external limitations imposed upon a third world Latin
American country—even an oil country—internal limitations represent as
much of a potential barrier to the development of the Bolivarian
project.

Venezuela’s opposition succeeded in
temporarily subverting the
democratic project of the Bolivarian revolution by forcing the last one
and a half years to be dominated by exercises in representative
democracy. But the strength of the Bolivarian project has been
its
articulation of an alternative model of democracy. This has been
one
of the few areas in which Venezuela has been able to advance on its
own. Lacking a regional movement dedicated to opposing
neoliberalism
it is difficult for Venezuela to do so alone, without isolating itself
in an artificial, and likely short-lived socialist bubble.[3]

Depending as it does on oil wealth,
Venezuela has the advantage of a
certain autonomy from global capital in the sense that it does not
depend as heavily on foreign lending institutions and can finance its
development projects independently. Yet this autonomy is also the
firmest guarantee of Venezuela’s continuing integration into the global
economy. Oil wealth is of no use to the Bolivarian revolution if
it
cannot be sold on the world market. As a recent article in the
Economist commented: “Chávez…has a grandiose scheme, called
Petroamérica, for a Latin American energy conglomerate based on
an
alliance of state oil companies. Argentina's president, Néstor
Kirchner, has shown interest. Brazil is less keen. But, for now, the
Bolivarian revolution rests firmly on the shoulders of the foreign oil
giants.” Even south-south trade relations pursued by
Chávez have not
effected significantly Venezuela’s dependence on the US market.

Compounding these difficulties, and
intricately related to them, is
the hesitancy of the V Republic to shed the vestiges of the IV Republic
once and for all.[4]
After 6 years of ‘revolution’ and a new constitution, the Venezuelan
state has too much in common with the very un-revolutionary Venezuelan
state that kept the country mired in the corrupt selective distribution
of oil wealth from 1958-1998.

Politically the transition from
representative to participatory
democracy has proceeded at a painfully slow rate. Economically,
the
government has often proven reluctant to act in accordance with its own
revolutionary rhetoric. The few currently-existing examples of
co-management in Venezuelan factories have so far failed to concretely
improve the lot of the workers in question, and examples of
self-management do not yet exist. Culturally the revolution has
seen
some impressive advances, though largely limited to education.

Yet even the promise of the
educational misiones, providing
free and accessible education from basic literacy to university, raises
questions of sustainability. Opposition critiques that
Chávez is able
to maintain the misiones solely due to record-breaking oil
prices is probably exaggerated, but it represents a very real
concern.
Former Minister of Higher Education Hector Navarro has called for the
‘municipalization’ of higher education as a means of institutionalizing
the universal right to higher education. Yet this would require a
concurrent ‘municipalization’ of state resources and power structures,
something that has yet to happen to a significant degree.

What has kept the revolutionary
process going despite these barriers
is the genuine cooperation between Chávez’ leadership and the
Venezuelan people, represented by political mobilization.
“Compared to
Venezuela’s past,” notes Infante, “the Bolivarian project’s
politicization of the people is clear. Whereas previously, social
exclusion was a government policy, now social inclusion is a
constitutional right.”

Practice and Ideology

Facing
history:
Chávez draws a lesson from the French Revolution. The paintaing
“Raft
of the Medusa,” by Theodore Géricault represented a critique of
post-revolution French government, and bureaucratic mismanagement.Credit: Jonah Gindin

In a recent press release
Chávez referred to the philosophical
responsibilities of the current juncture. “As Victor Hugo pointed
out
in Les Miserables,” he noted “we had abolished the
ancién
regime in effect, but we had not been able to abolish it in our
ideas.” We must “transform the ancién regime not only in
actions, but
in ideas,” continued Chávez. “If we don’t, it will come
back to haunt
us, against our children tomorrow and will once again install the old
ideas of egotism, individualism, the exploitation of some by others,
the degeneration of man, as Víctor Hugo said, the degredation of
women
and the atrophy of children for want of knowledge.”

As the only community-based
organizations that bring together
chavista activists from all sectors of Bolivarian society, the UBEs
have a unique potential to evolve into a national forum capable of
providing a voice for community interests that act not only as a
consultative body, but as an active partner in government.
Currently
Chávez has no adequate mechanism for consulting the nation on
state
decisions. The National Assembly is seen as inefficient and
ineffective by many Venezuelans. Regular referendums on specific
issues would be too impractical, and would run the risk of
desensitizing the population to electoral politics. If a national
forum existed with representatives from community UBEs, who were
elected, and who were completely accountable to their base (perhaps
through a system of constant reporting and dialogue, buttressed by
short rotating terms) it would provide a body with which Chávez
could
be forced to consult regularly, and effectively.

Yet so far the UBEs have been a tool
of the governing party, the
MVR. They do not have any democratic structure, created as they
were
specifically to facilitate the ‘No’ (against the recall) campaign
leading up to the referendum. The future of the UBEs will likely
be
decided by the communities across the country in which the UBEs are
mobilizing and from which they draw their membership. And these
communities have made their distaste for appointments from above
abundantly clear.

As Chilean writer and activist Marta
Harnecker notes in a
preliminary version of a paper on the need for a wide political font,
it “should not be a political organization decreed from above without
taking into consideration the base. In many cases, the leaders of
the
Bolivarian forces are not the real leaders of their respective sectors,
distancing the base and forcing them to find other forms of
organization.”[5]

If the UBEs are to remain relevant,
and especially if they are to be converted into Social
Battle Units (UBSs), forming the base for a nation-wide participatory
forum, it will be due to grassroots initiatives. As Harnecker
notes,
“It should be an organization in which exist mechanisms of control of
its leaders by the base.” And the primary focus of this base
after the
regional elections will be concrete advances in participatory
structures such as the local planning councils. Whether the
government
facilitates this project or tries to block it will be a crucial test of
their willingness to put rhetoric into practice and to dilute their own
power in the interests of further empowering the Venezuelan people.

Back in Petare, William Yaguaran,
an army reservist who teaches history in Caracas’ poor barrios,
refers to the importance of “peoples’ participation in constructing
their own histories.” If the history of the Bolivarian revolution
is
to be written by the Venezuelan people, it must continue to be what
ex-minister of Higher Education Hector Navarro describes as “a process
of learning to do, and learning by doing—a process of building
learning, by doing learning.”

[1]Ultimas Noticias
is Venezuela’s largest circulating daily newspaper, and perhaps the
only one that manages to maintain some semblance of political balance
in its coverage; Radio Nacional is the official government
radio station; Channel 8 (Venezolana de Television—VTV) is the
state television channel.

[2]
The neighbourhood is named after January 23rd, 1958—the date that
Venezuelan dictator Peréz Jiménez was overthrown.
Built during
Jiménez’ dictatorship, its original name was Urbanizacion 2
de Deciembre.

[3] The importance of Venezuela as a source of oil
for the US market is what would ensure such a socialist-bubbles short
life.

[4]
The Fourth Republic refers to the period between 1961 and 1999, before
Chavez became president. The Fifth Republic, refers to the period after
1999, when the new constitution was approved.

• U.S. sanctions against Caracas further damage already
tenuous diplomatic ties between the two nations.

• In September, the State Department humiliated
Chávez with
human trafficking charges, but now has switched to constructive
rhetoric. Is this confusion or does it represent a policy?

• By threatening to block Venezuela's access to
international loans with its de facto veto in international lending
institutions, the Bush administration is attempting to punish President
Chávez for his August 15 referendum victory and to placate
domestic
critics who increasingly are complaining that the White House was being
too soft on Chávez.

• The deterioration of bilateral relations could
threaten
the much needed flow of Venezuelan oil to bolster the United States'
still sputtering economy.

• Domestic political considerations in relation to the
November presidential election are at the heart of the White House’s
action against the Chávez government.

• Like Washington’s certification process, in which the
performance of foreign governments’ anti-narcotics and
counter-terrorism efforts is evaluated, Washington’s procedures for
monitoring foreign governments’ human trafficking records are
completely devoid of objectivity or meaningful standards.

Although faced with rising international oil prices, Washington
has,
in an almost consciously destructive mode, once again placed ideology
over national interests by single-mindedly aggravating its already
strained relationship with Venezuela. The U.S.’ oil-rich southern
neighbor provides approximately 1.4 million barrels per day to satisfy
the country’s burgeoning energy needs, and has become the fourth
largest foreign supplier of petroleum to the U.S. By attempting to
punish Venezuela for the outcome of the August 15 referendum, through
the imposition of economic sanctions in response to the Chávez
government’s alleged failure to crack down on international human
trafficking, both in its language as well as its actions, the Bush
administration has once again demonstrated a repellently vindictive
nature. Washington’s decision is patently based more on domestic
political considerations than on Caracas’ record regarding human
trafficking. With two months still to go before the U.S. presidential
elections in which Florida’s key electoral votes are at stake, the Bush
administration has targeted Venezuela in order to appease Florida’s
staunchly anti-Castro constituency, as well as its growing
anti-Chávez
Venezuelan expatriate population, hoping to assure victory on November
2 in the pivotal swing state. The debasement of an important global
issue through such political skullduggery has not only placed
U.S.-Venezuelan relations at an all time low, it also has raised
questions over the visceral nature of Washington’s commitment to
democratic ideals throughout the hemisphere.

Political Motivations behind Sanctions
The
September 10 announcement of economic sanctions against Venezuela
represents the latest chapter in persistent U.S. attempts, some more
gross than others, to undermine Chávez’s credibility and his
country’s
governability. Broadly defined as “recruiting, harboring, transporting
or obtaining a person through the use of force, fraud or coercion to
subject a person to involuntary servitude, debt bondage or slavery,”
human trafficking often implies sexual exploitation. The U.S. has
accused Venezuela of shipping its own women overseas and importing
women from other South American countries to take part in the sex
industry. Through its new initiative to block as much as $250 million
in loans to Venezuela from various international bodies, which is a
consequence of labeling Venezuela a human-trafficking violator,
Washington is now intent on exacerbating the already precarious nature
of its relationship with Caracas.

Basing its trafficking finding upon a State Department report
first
released in June, the White House appears to be manipulating the global
concern of human trafficking to pursue its own narrow political agenda.
The announcement of similar anti-human trafficking sanctions against
Cuba, North Korea, and Sudan – three countries whose governments
historically have been targeted by Washington’s negative initiatives –
strengthens such speculation, as Venezuela is not customarily linked
with these countries. Other aggressive human-rights violators, such as
China and Saudi Arabia—with the latter specializing in the export of
terrorists and the import of sex workers—have not received comparable
rebukes, highlighting the dubious integrity of the State Department
findings and further supports suspicions that political, not
humanitarian, considerations lie behind the invoking of sanctions.

Mixed Messages
Secretary of State Powell’s
response in dealing with Chávez has been inconsistent. He cast
doubt on
his country’s goodwill toward Venezuela’s populist leadership when he
commented on September 12 that, “We have concerns about some of the
actions that President Chávez has taken over the years in
pursuit of
his vision of Bolivarian democracy.” Such language throws cold water on
attempts at reconciliation, though on October 4 he said, “We are
looking forward to improving relations with Venezuela….the referendum,
that’s over and behind us, and we should find ways to cooperate.”
Adding to Powell’s conflicting attitude towards Venezuela is newly
sworn-in U.S. Ambassador William Brownfield, who said on October 2, “We
are ready, disposed, prepared, and enthusiastic about exploring the
possibility of improving bilateral relations between our two countries
and to collaborate on regional issues.” These comments, coming on the
heels of the human trafficking accusations, highlight the need for
Powell and the administration to cease sending mixed messages and
instead develop a consistent and positive relationship with the
Chávez
government.

The Dirty Truth behind US Sanctions
President
Chávez’s overwhelming victory in the August recall referendum,
and the
subsequent setback suffered by the opposition’s reputation for
credibility as a result of its self-discrediting claims of electoral
fraud, appears to be one of the major inspirations behind Washington’s
trafficking initiative against Venezuela. Unable to bring down the
democratically-elected government in the April 2002 coup, the chronic
opposition-led strikes in 2003 and, most recently, by a closely
monitored and thoroughly validated national plebiscite, the Bush
administration has now reached into its bag of dirty tricks to darken
Venezuela’s economic and political prospects.

The White House has begun planning to obstruct international
credits
intended to bolster Venezuela’s anti-poverty programs and other social
reforms, which undoubtedly would have further enhanced Chávez’s
popularity. However, it appears more than likely that Caracas will be
able to put together an alternative network of private and public
financial arrangements to facilitate the continued funding of its
scheduled programs, even without Washington’s backing. In a September
11 press conference, Andrés Izarra, the Venezuelan Communication
and
Information Minister, declared, “We don’t believe the U.S. vote against
international loans will be enough to block Venezuela from having
access to those loans.”

Although Washington apparently wants to limit Venezuela’s
access to
development assistance for an array of misanthropic motives, the White
House consistently has provided financial backing to political groups
opposed to Chávez’s populist rule. Through the United States
Agency for
International Development (USAID) and the partisan National Endowment
for Democracy, U.S. institutions have given up to $10 million over the
last two years to various anti-Chávez public and private
institutions.
Súmate, a civic organization which helped organize the recent
unsuccessful recall referendum and whose members carried out the
controversial exit polls that led to the opposition’s bogus electronic
fraud claim, received $84,840 from USAID to promote “electoral
participation” on August 15. The organization’s contacts, however, were
not limited to U.S.-funded aid agencies. Miriam Kornblith, Ezquiel
Zamora’s replacement as vice-president of the National Electoral
Council (CNE), also served on an advisory committee organized by
Súmate
to oversee electoral issues. Through her connection to both
Súmate and
the CNE, Kornblith's apparent conflict of interest highlights a
possible conduit for Washington’s continued meddling in Venezuela’s
domestic affairs, and perhaps underlines the true motives behind the
White House’s anti-trafficking sanctions.

Economic Consequences of the Sanctions
Both the
United States and Venezuela are heavily dependent on each other for
their economic well-being. On one hand, Washington relies on its
southern neighbor’s abundant petroleum reserves to sustain its
ever-growing energy needs. Similarly, Caracas is beholden to the
region’s dominant economic power for the constant influx of
petrodollars required to maintain its expanding social programs. By
further straining its diplomatic ties with the important oil-producing
country, Washington is not only undermining its standing within the
hemisphere as a fair-minded champion of genuinely democratic principles
and expanding trade, but also is possibly placing into jeopardy its
vital access to Venezuela’s vast petroleum reserves. As international
oil prices skyrocket to as high as $51 per barrel due to concerns over
production in Nigeria, Iraq and Russia, the Bush administration would
be wise to seek compromise, not discord, with President Chávez
to
ensure that there is no question that Caracas maintains its constant
supply of oil to the ever-increasing US domestic market.

To date, the Chávez government repeatedly has reassured
U.S.
officials of its continued commitment to export oil to the United
States. Since his August 15 recall victory, the Venezuelan president
has made overtures of reconciliation to his American counterpart in an
attempt to shore up the now very tricky relationship between the two
countries.

U.S. Domestic Implications’ Key
The September 10
announcement of the implementation of sanctions in response to
Venezuela’s supposed failure to take effective action against human
trafficking was an overt gesture of contempt towards Caracas. It did
nothing but provide a spurt of joy to rightwing elements of Florida’s
powerful Cuban-American and Venezuelan expatriate communities whose
support the Bush administration requires to be competitive in next
month’s presidential race. To appease this important swing-state
constituency, which sees Hugo Chávez’s good relations with Fidel
Castro
as a burning indictment of the Venezuelan leader, Washington has once
again, to its own benefit, intertwined domestic politics with foreign
policy issues, blurring the lines between partisan electoral
politicking and bona fide national interests. Such a political
strategy, although beneficial in the short term to one political bloc
or the other, will eventually damage the United States’ credibility
throughout the region and, in turn, its standing in the global
community at a time when its integrity is already being questioned on
Iraq and the Kyoto Accords, as well as numerous other fronts.

This analysis was prepared by Larry Birns and Mark
Scott, respectively Director and Research Fellow of the
Washington-based Council on Hemispheric Affairs.

Additional research was provided by David R. Kolker
and Eric Lynn, COHA Research Associates.

The
current ‘oil price crisis’ in reality reflects an emerging and
permanent supply crisis for oil and gas (which currently provide
about 65% of world commercial energy).

Initially,
this will concern ever slower
net
additions of world production capacity in the face of strong demand
growth, and will manifest itself as continued oil price rises, and
continued gas price rises.

For oil, the
myth of OPEC always being the
‘supplier of last resort’ has in 2004 already been discredited if not
finally destroyed. Soon after the present and short-term ‘price crisis’
... which can only intensify in the 2005-2008 period ... and within at
most 10 years, both oil supply and natural gas supply will enter into
constant and terminal decline, due to physical depletion.

This is to
some, small extent admitted in a
grudging way by so-called ‘leaderships’ of the business and political,
financial and economic ‘communities.’ Opinion formers and policy makers
in late 2004 now admit that ‘oil prices will remain high’ because of
fast demand growth and slow growth of supply, but add brave claims that
oil prices ‘will fall to normal levels,’ perhaps by the end of 2005,
without explaining which normal levels and why!

In fact only
two factors can bring down oil and gas prices (which in any case
are interdependent and related through same-market trading):
increasing supply or falling demand.

For the first,
increasing supply, the outlook
is bleak. Worldwide oil depletion is now running at about 1.25-1.5
million barrels/day (Mbd) of capacity lost each year, and net additions
to world oil production capacity are small, slow, high cost, and
irregular.

On the demand
side, because of strong
industrial growth in China, India, and also in East Europe, West Asia
and Latin America, oil and gas demand is growing at its fastest
percentage rate since 1975-80.

In
many non-OECD countries
experiencing fast industrial and economic growth, typical annual growth
rates of demand are 5%-9% for oil, and 8%-12% for gas.

World demand
growth is admitted by the IEA to
be running at 3%/year or more and will stay strong unless world
economic recession is triggered through OECD countries racking interest
rates to double-digit highs, or by runaway oil price rises to well over
US$100/barrel (US$/bbl), equivalent to gas prices at US$16/million BTU,
causing an inflation outburst, first and mostly in the OECD countries.

This ‘price
crisis’ could occur at almost any
time, especially due to further and more intense destabilization and
conflict in the Middle East, or through stoppages, accidents, or
weather-related damage to very large oil and gas production, refining
or transport systems anyplace in the world. We can note that current
oil prices, at around US$50/bbl, are in real terms equivalent to only
about 60% of the peak price they briefly achieved in 1979-80, over 24
years ago.

Oil crisis
then and now: The ‘oil
crisis’ of 1979-80 was due to the Iranian revolution cutting supply to
world oil markets. The physical supply shortage or undersupply was
equal to about 5%-7% of daily needs, for a period of over 4 months.

In today’s
terms, with world oil import demand running at around 46 Mbd and
growing very fast (at over 3 Mbd per year), an equivalent
supply cut would be about 2.5-2.75 Mbd.

This assumes
that ‘normal’ levels of spare
supply capacity exist, but in fact today’s margin of spare capacity has
been deeply cut with the loss, or effective sabotage of Iraq’s oil
export capacities (around 2.4 Mbd prewar) through military
invasion and destabilization by the US and UK, in what UN
Secretary-general Kofi Annan describes as an illegal war.

When this
illegal war was decided in 2003,
Iraq’s export capacities of around 2.4 Mbd were likely equivalent to
60% or 65% of world ‘spare’ capacity. Today, 18 months later, this
spare capacity margin has dramatically shrunk to probably less than 1
Mbd, because of demand growth and effective loss of Iraqi oil export
capacities, ongoing depletion losses, and slow growth of new oil
production capacity at the world level. Relative to current oil demand,
this 0.75-1 Mbd margin is equivalent only to about 4 months of world
demand growth, or 3 months of world import demand growth.

Any
supply cut-off, of
not much
above 1 Mbd and for any reason will in these conditions rapidly lever
up oil prices -- and by ‘contagion’ effect gas prices -- in a very
short period of time.

Iran attained
its ultimate peak oil production
more than 20 years ago. Since 1975 its population has nearly tripled,
and today it has one of the fastest growing car fleets in Asia (after
China), leading Iran to become a large and growing importer of
refined products, and a declining exporter of crude.

When or if
Iran’s so-called ‘illegal’ nuclear
installations are of course ‘surgically’ bombed by Israel or by US
forces stationed in Iraq, another Iranian oil crisis, this time by
Iranian embargo, would very surely and rapidly drive oil prices well
beyond US$100/bbl.

This would
again be through political decision,
but the emerging and short-term prospect is of near-simultaneous peaks
for world oil and then world gas production being attained in the
2008-2018 period. This will bring structural physical shortage and
permanent undersupply. We are in fact entering a terminal energy crisis
for ‘cheap and abundant’ oil and gas supplies, and recognition of this
requires urgent attention and immediate action for energy transition.

In this new and
emerging context, there is ever
less need or reason for political action, embargo, or war damage --
that is ‘geopolitical risk’ -- to be considered the sole cause of oil
and gas prices attaining ‘extreme’ levels. This is due to the ‘pincer
action’ of increasing depletion losses and slower annual additions of
new capacity in a context of fast energy demand growth. This first
limit concerns oil, but within a period no more than 10 years after
‘peak oil’ is attained, the same will occur for world gas production
capacities. In addition, and because of ‘peak oil,’ world gas demand
will increase very fast through massive demand shift from oil to gas.

Faced with
structural under-supply until and
unless economic restructuring and energy transition are implemented on
a worldwide basis, the final energy crisis will surely test leaderships
of the big consumer and importer nations and groups of nations, now
including nuclear armed China, India and Pakistan as well as the EU and
USA.

Action and
goals for energy transition:
The Kyoto Treaty and ‘Kyoto process’ for implementing fossil energy
saving, reduction of CO² and other climate-changing gas emissions,
and
development of renewable energy-based, sustainable infrastructures --
that is “clean development” -- will in theory and by about 2012 bring
falls in oil and gas demand of some ratifying countries.

Other ratifying
countries, such as Germany and
Denmark, which have developed large wind electric capacity and are slow
growth/high unemployment economies, will not need to target large falls
in their fossil energy burn or purchase of tradable licenses to
pollute. These licenses or permits essentially transfer nominal
responsibility for oil, gas or coal burning from richer, oil- and
gas-intensive economies to low income, presently energy-lean or
energy-extensive economies.

Overall and in
fact, Kyoto Treaty
implementation starting in about 2008 will result in only marginal, or
no total and overall reduction of world fossil energy consumption by
2020-2030.

In the
near-term, certainly to 2010-2015, world
total fossil energy demand will likely increase even faster than today,
because of accelerated ‘conventional’ economic development by the newly
emerging industrial superpowers, China and India, and several other
large population, fast growing economies such as Brazil, Pakistan and
Turkey.

This creates
nearly sure ‘trends continued’
outlooks of world demand for oil and gas continuing to expand, perhaps
as fast as today, until physical rationing and allocation of fossil
fuel supplies becomes the last option and only solution, because of
physical depletion.

Oil and gas
price rises are totally sure, and
the ceiling prices needed before the present market trading system is
abandoned is hard to estimate.

Extreme prices
for oil and gas will in fact
first impact the world’s most oil-intensive and gas-intensive economies
-- that is the OECD group of countries. This will surely start causing
severe economic difficulty within the very short-term near future, in
the 2004-2006 period. This makes it of strict national interest for
OECD countries to set plans for physical rationing and supply
allocation, and start implementing programmed cuts in oil and gas
consumption, and development of renewable energy output capacities over
and above any Kyoto process requirements, which in any case will not
start being applied much before 2008.

By 2015, it
will be urgent to consider ways and
means to reduce world total oil and gas demand on a year-by-year basis.
Given the vast scope of such a program, and the need for the OECD
countries to act in the immediate short-term of 2004-2008, the action
and goals of a world energy transition program should be proposed,
discussed, decided and start being applied from 2004-2005. Currently
there is almost no movement towards to setting frameworks and agendas
for this very urgent task.

Geopolitical
risk: In the
mid-term and long-term there is recognized need to cut oil and gas
burning to limit climate change. More importantly in the short-term
there is an increasingly urgent need to limit and head off oil and gas
price explosions able to trigger ‘great power rivalry’, that is armed
conflict for remaining reserves of oil and natural gas between the
world’s economic superpowers, motivated by ‘national economic survival.’

World regions
most exposed to this risk are
evidently the Middle East and Central Asia, and to a lesser extent
Africa. We can note that threats of using military invasion, or actual
invasion -- of Iraq in 2003 -- did not in any way ‘facilitate and
improve’ oil supplies to the large consumer countries and groups of
countries.

In
fact the exact opposite: the
US-UK invasion of Iraq has effectively sabotaged or neutralized Iraq’s
oil export capacity for many years.

Any
international plan and program for energy
transition, perhaps modeled on or incorporating the Kyoto Treaty, must
ensure that oil producers are not exposed to military invasion, nor
catastrophic falls in the oil price and their export revenues, when or
if they choose to husband or conserve their non-renewable resources,
and cap their oil or gas production before reducing it, instead of
waiting for resource depletion and exhaustion to do the same job. No
“obligation to supply” a depleting, non-renewable resource exists.

The risk of
great power rivalry for remaining
oil and gas reserves is high. Even the most unconditional believers in
“unlimited oil and gas reserves” accept that covering depletion loss,
and adding net production capacity takes time and is increasingly
costly to develop.

The risk, or
threat of large nations or groups
of nations ‘jumping the queue’ and taking oil and gas production
capacity wherever it already exists -- leading inevitably to armed
resistance, as in Iraq -- is real.

Certainly since
1973, political deciders in the
US have considered that any embargo or ‘unreasonable’ reduction in
supplies of oil, by exporters, is hostile to US vital interests --
opening the way to retortion or revenge by military invasion, to
restore the ‘free flow of reasonable priced oil’ ... as it was called
by George Bush-1 at the time of the ‘liberation’ of Kuwait in 1991. Any
other large oil-importer nation, or group of oil-importer nations with
nuclear weapons capability can adopt the same ‘oil supply security’
doctrine.

Participation
in faster development and
construction of non-oil, non-gas renewable energy alternatives to
fossil fuels, and especially substitutes for oil, will therefore reduce
invasion risks for oil and gas exporter countries. The same effort will
also reduce ‘threats to economic security’ of the large oil importer
nations and groups of nations.

As noted above,
current and future oil and gas
‘supply gaps’, causing undersupply to markets, will become structural.
This will raise the risks from failed attempts at obtaining oil
reserves or production capacity through military invasion, as in Iraq.

Logically,
this should lead to renouncement of the ‘military option’ for obtaining
oil and gas production capacities.

The non-option
of military invasion as a
‘respose’ to declining supply and rising prices should urgently be
replaced by international cooperation and action for energy transition,
featuring concerted near-term multilateral action to first limit
growth, then reduce world total oil and gas utilization, while rapidly
developing larger-scale renewable energy systems.

The
double-edged sword of oil and energy prices:
On the one hand higher oil prices increase world oil demand until very
high prices are attained, as is very simply verified by checking world
oil demand growth, and growth of oil prices through 1999-2004. On the
other hand, much higher oil and energy prices are obligatory for
rationalizing and justifying replacement and substitute energy sources,
systems and strategies in the energy economy.

Neither
of these two propositions are accepted.

The so-called
financial community, notably the
presidents of the US, European and Japanese central banks, and the
IMF’s Chief economist have in 2004 repeatedly claimed, without
presenting any coherent evidence, that high or ‘extreme’ oil prices can
only depress economic growth.

If this
happened, it would lead to a fall in
world oil demand growth, or even to zero growth of world oil demand,
with actual contraction of demand being possible if the ‘hard landing’
continued. In fact the real world, real economy does not operate this
way. Increasing oil prices tend to reinforce and increase economic
growth at the world level, leading to further oil and energy demand
growth.

Through
the period 1999-2004, as oil
prices
have increased, world oil demand growth rates have consistently
increased -- not decreased.

To accommodate
this distressing ‘reality gap’
between official mythology, and measurable economic reality, so-called
‘experts’ now add that ‘extreme priced oil’ will not hurt economic
growth until about 12 months have elapsed, enabling the ‘real but
delayed action’ negative impacts of high priced oil to work through the
economy. This fantasy economics is unlikely to translate to reality
unless interest rates in OECD countries are hiked to double-digit rates.

Higher
priced oil will almost certainly continue to drive world economic
growth until oil prices attain at least US$75/bbl.

In addition,
the first slowing impacts on
economic growth of much higher oil and energy prices will occur not in
low income oil-importing countries, as repeatedly claimed by official
economic mythology, but in the most oil-intensive economies and
societies of the OECD group of countries. Oil saving is therefore of
basic interest, concern and utility to the most oil-intensive,
oil-wasteful economies and societies.

Development of
renewable energy systems has in
general been slowed first by derisorily low and volatile prices for
competing fossil energy sources through 1986-99, ‘hidden’
infrastructure subsidies for fossil-based energy and nuclear power, and
by high capital costs and long lead times for proving, then developing
large scale renewable energy systems. In addition, renewable energy is
often low-intensity and needs wide area conversion, making necessary
the integration of energy-only production and output with other forms
of local or regional economic development (e.g. agriculture,
sylviculture, mariculture, horticulture etc).
For all of these reasons, high and stable fossil energy prices are
needed to make renewable energy systems competitive and feasible using
conventional cost-benefit analysis.

For the oil and
gas exporter countries ...
whether OPEC members or not ... there is also at least mid-term, and
surely long-term national interest in developing and proving
substitutes and alternatives to fossil fuels.

One major
reason (apart from reducing invasion risk)
for their active participation in oil- and gas-saving and fossil energy
replacement by renewables is to conserve their non-renewable economic
resources and limit environment damage, and economic resource
misallocation caused by maximizing extraction.

The ultimate
peak for the OECD group is about
25 barrels/capita/year (bcy) in the USA and Canada, and is around 10-12
bcy in the EU nations, Japan, South Korea, Taiwan and Singapore.

Conversely,
the low income but fast
growing,
high population, industrializing countries including China, India,
Pakistan and Brazil, with under 5 cars/100 population, currently use
only about 1.25 - 2.5 bcy.

Due to extreme
consumption in the OECD nations, world average PCOD (about 4.7 bcy
and increasing, albeit slowly)
is well above per capita oil demand in the new and emerging industrial
superpowers, and over 8 times the average PCOD of rural populations in
the low income countries of Africa, Asia and Latin America.

Total
commercial energy demand is in general
2-3 times the above rates for oil-only demand and consumption,
depending on development and utilization of pipeline gas and LPG, the
use of domestic and imported coal, and the size and output of installed
non-oil electric power capacities.

In many low
income countries, so-called ‘non
commercial’ energy, that is biomass source energy specially in rural
areas, contributes up to 30% or more of total national energy
consumption. Urban migration and urban industrial development, driven
by and causing further rural-urban migration, inevitably shifts energy
demand from ‘non-commercial’ to commercial energy.

The net result
is to increase national average
PCOD, making it necessary to prioritize sustainable rural development
not only to assure food supply and conservation of bio-resources, but
also to limit national oil and gas demand growth.

Current and
conventional urban-industrial
economic infrastructures are close to 100% dependent on oil and gas
energy, thermal electricity, and hydrocarbon based raw materials, as
well as derived products (for example gas and oil-based fertilizers
and insecticides for food production, materials utilized for building,
and energy needs of operating ‘conventional’ habitat and transport
systems).

Economic
growth, worldwide, is at present
entirely dependent on increased oil, gas and electric power
consumption. This results in potential world oil and gas demand being
effectively close to ‘unlimited.’ If for example the world was
able,
by miracle, to attain the extreme heights of US oil consumption (about
25 bcy)
world oil demand would run at around 445 Mbd. This production
capacity
-- very simply -- will never be attained on this planet. No energy
agency, data source or ‘expert’, however optimistic or illuminated,
will provide claims that world oil production capacity can ever exceed
about 120-150 Mbd before ‘peak oil’ is attained.

Despite this
reality, US politicians claim that
US-style ‘prosperity and wellbeing’ are global objectives and can be
attained for example in militarily invaded and occupied Iraq: if this
occurred, Iraq’s current 25 million population would require about 1.75
Mbd, or well above Iraq’s present total, war damaged oil production
capacity !

Energy
transition imperatives:
The first imperative can be understood from the above: with the world’s
current population of around 6.4 billion, and maximum likely oil
production capacity of around 90 Mbd, world average PCOD will probably
never attain more than a short-term peak of around 5.25 bcy.

After
this peak, average PCOD will
decline at
about 3%/year, as oil and gas depletion sets in after 2008 while world
population continues to grow, albeit at ever shrinking rates.

The decline
rate of 3%/year for average PCOD
can be split as around 1.5%/year for the fall in net oil production,
and about 1.5%/year due to remaining population growth. From about
2010-2015, depletion will accelerate the annual decline of world oil
production to 3.5% or more, and world gas output will at that time peak
out, before starting to decline.

Current rates
of oil and gas demand on a per
capita basis in the OECD group, especially the US and Canada, are
therefore impossible to sustain and must be reduced by large amounts in
a short period of time.

Conversely, the
low and medium income nations
and economies can target some small increase in their national average
PCOD, during transition. In all cases the role of oil and gas prices
will be significant in entraining and directing economy restructuring
for energy transition.

It is necessary
and urgent to consider ways and
means to reduce world oil demand growth to zero, and then reduce world
oil demand, at latest from the date world oil production peaks, and
preferably well before. This requires the OECD countries to set targets
for oil demand reduction able to accommodate short-term increases in
the PCOD of the emerging industrial powers, still in demographic
transition and rapidly developing their economic infrastructures.

Overall,
this results in targets
for OECD national oil demand cuts, and within a short period gas demand
cuts, at rates up to 10%/year, depending on national demographic
trends.

For evident
geological and environmental
reasons, the fossil fuels will phase out, and must be replaced by
reduced overall energy needs, and by increased supply of renewable
energy. The second imperative, therefore, is for large-scale
multilateral program for rapid, cost-effective development of
sustainable economic infrastructures based on renewable energy sources.

Conclusions:
The strengthening
likelihood is that oil prices will easily exceed US$75/barrel in the
absence of any war, sabotage or hostile action, solely because of
‘structural undersupply’ and almost certainly by 2008. This itself will
powerfully draw attention to study and action for firstly slowing the
growth of oil and gas demand, then reducing demand for these fossil
fuels.

Only
at genuinely ‘extreme’ oil
prices, well above US$100-per-barrel, will there be a rapid and
uncontrolled fall in fossil energy demand, firstly in the OECD
countries, triggered by economic crisis.

This will
come too late to offer any
chances of
organized and efficient economic and energy restructuring, especially
in the OECD economies and societies, which are the most oil-dependent
due to their high or extreme average per capita rates of oil demand.

Laisser-faire
scenarios will necessarily
include a new ‘Great Depression’ to a backdrop of already serious
tension and low-level but increasing international conflict and warfare
focused on the Middle East (‘war against terror’ and ‘war for oil’).

De-globalization,
or increased
self-reliance will necessarily feature in longer-term restructuring of
the world’s energy and economic systems.

The sooner that
internationally agreed targets,
frameworks and structures for managing energy transition can be set,
the greater is the chance of avoiding endgame energy resource
conflicts, and achieving long-term sustainability.

The likely,
near-term oil shocks due in final
analysis to emerging supply deficits will be ‘salutary crises’ if they
bring coherent action to head off irremediable crisis.

*******************

Andrew McKillop is a
former expert-policy and programming, Division A-Policy, DG
XVII-Energy, European Commission, founder member, Asian Chapter, Intl
Assocn of Energy Economists. Currently in France he is available for
consultation and research assignments. You may contact Mr.
McKillop by
email at xtran04@yahoo.com

THE INTERNATIONAL FORECASTEReditor Bob Chapman writes: World
oil demand since 1988 is up 25% from 64.95 million b/d to 82.15 million
b/d ... Europe is up 16% ... the US 18% ... Japan 25% and China 175%.

On an absolute basis, American
consumption is up 3.08 million b/d and China's is up 3.98 million b/d.

China consumes more oil than Japan, 7.6% of the
world total versus 7.4% for Japan ... Russia is a badly needed source
of oil and gas supply for China and Putin's move is very relevant.

Oil could well put Russia in the position Saudi
Arabia is today in the future ... the cash flow will be enormous which
will force Russia to invest worldwide. Elitist interests in the West
want part of that action, particularly in the Caspian Basin, that is
part of what our two invasions were all about.

If
we continue to push the issue, we could end up in a nuclear war and we
can assure your Russia has the brains and guts to push the button. We
are already an invasion too far.

Within OPEC, only Saudi and Venezuela can
increase production and the Saudi production is heavy, high-sulfur
crude that is very undesirable. The referring capacity isn't available
to handle that sludge. In addition, that heavy oil has to be produced
by massive water injection. Water is scarce in the desert.

In addition, the cost per barrel is US$32.00
.. we cannot expect any oil increases from Iraq with the pipelines
being blown up weekly.

President Hugo Chavez
Frias
& George W. Bush

Venezuela has the oil, but needs massive
outside investment. We do not know if the elitists will give them the
money in as much as they periodically, like clockwork, attempt to
dislodge him or murder President Hugo Chavez Frias.

Alberta tar sands have a cost basis of US$30.00
a barrel and more oil than Saudi Arabia ... it will take lots of money
and natural gas, but the oil is there in very large amounts.

If the US pushes Russia on the
Caspian, there will be nuclear war.

Nigeria is a zoo as religious wars enter their
40th year ... oil is moving higher and it will stay at higher prices
until a depression begins and finally it will fall like everything else.

Then, we have ongoing terrorism that will not
go away in a hurry and that brings more speculation that drives prices
higher.

How can anyone in their right mind
expect oil prices to go lower when the dollar is going 30% lower?

Oil has to go 30% higher ... that is about
US$60.00 to US$72.00 a barrel. Oil is leading the discounting of
the
US$ as gold and silver will ... or are in the process of doing.

China desperately needs Russian oil and
minerals .. China has lots of US$. Russia does not want depreciating
US$ ... it is in Russia's
best interest to want Euros and gold ... China sells US$ to buy what it
needs from Russia.

Are you getting the picture?

Aluminum prices hit a fresh nine-year high of
US$1,857 a tonne on the LME, exceeding the previous long-term high of
US$1,845 set in April. Lead prices hit a peak of US$942 a tonne, its
highest since 1993. Copper jumped through US$3,000 a tonne close to a
new high while nickel is up 25% in the past two weeks ... oil's next
resistance level is US$53.30 a barrel.

The Columbus American History Never Knew

Since
1892, when President Benjamin Harrison issued a proclamation urging the
nation to mark the day when Christopher Columbus is recorded to have
discovered America, the United States has enthusiastically organized
school programs, plays, parades, and community-wide festivities across
the country. We now celebrate Columbus Day as a day of rest and
relaxation. American History, however, fails to teach the true meaning
or significance of the man we now honor with a national holiday.

Union,
NJ (PRWEB) October 10, 2004 -- Since 1892, when President Benjamin
Harrison issued a proclamation urging the nation to mark the day when
Chistopher Columbus is recorded to have discovered America, the United
States has enthusiastically organized school programs, plays, parades,
and community-wide festivities across the country. We now celebrate
Columbus Day as a day of rest and relaxation. American History,
however, fails to teach the true meaning or significance of the man we
now honor with a national holiday. For this, we must look back in time
to 15th century Spain:

The decree of expulsion read, “By the grace of God, King and Queen of
Castile, Leon, Aragon and other dominions of the crown - to the prince
Juan, to dukes, marquees, counts, the holy orders, priors, knight
commanders, lords of the castles, cavaliers, and to all Jews, men and
women of whatever age, and to anyone else this letter may concern -
health and grace unto you. You well know that in our dominion, there
are certain bad Christians that judaised and committed apostasy against
our Holy Catholic faith, much of it the cause of communications between
Jews and Christians. Therefore, in the year 1480, we ordered that the
Jews be separated from the cities and towns of our domains and that
they be given separate quarters, hoping that by such separation the
situation would be remedied. And we ordered that and an Inquisition be
established in such domains; and in twelve years it has functioned, the
Inquisition has found many guilty persons.”

The Jewish population was already expelled from England, most of
France, and most of Germany. The remaining Jews had to identify
themselves by wearing a round yellow patch over their heart. Thousands
of Jews were slaughtered. Many others "voluntarily" converted to
Christianity. The sincerity and religious loyalty of the "new
Christians" or Conversos (Marranos) were always suspect. Instead of
eliminating persecution, conversion made it worse.

A Sephardic Jew appointed physician and surgeon to the King was
their communities’ last hope. Also a mathematician, astronomer, and
instructor of the Sagres School of Navigation, Isaac Abrabanel
responded to the throne: “Your Majesties, Abraham Senior and I thank
you for this opportunity to make our last statement on the behalf of
the Jewish communities that we represent. Counts, dukes, and marquees
of the court, cavaliers and ladies... it is no great honor when a Jew
is asked to plead for the safety of his people. But it is a greater
disgrace when the King and Queen of Castile and Aragon, indeed of all
Spain, have to seek their glory in the expulsion of a harmless people.
I find it very difficult to understand how every Jewish man, woman, and
child can be a threat to the Catholic faith. Very, very strong
charges.”

Franciscan friar Alonso de Espina had published a book called the
"Fortalitium Fidei," which listed blood libels, "host degradations,"
and a variety of satanic misdeeds allegedly committed by Conversos and
Jews. One of his objectives was to show that the Conversos were bad
Christians (heretics) and therefore subject to the horrors of the
Inquisition.

The pogrom continued, “We further order that no person in our kingdom
of whatever station or noble status hide or keep or defend any Jew or
Jewess, either publicly or secretly, from the end of July onwards, in
their homes or elsewhere in our reign, upon punishment of loss of their
belongings, vassals, fortresses, and hereditary privileges. Thus we
grant permission to the said Jews and Jewesses to take out their goods
and belongings out of our reigns, either by sea or by land, with the
condition that they not take out either gold or silver or minted money
or any other items prohibited by the laws of the kingdom.”

“It is indeed the opposite," Abrabanel countered. "Did you not admit in
this edict to having confined all Jews to restricted quarters and to
having limited our legal and social privileges, not to mention forcing
us to wear shameful badges? Did you not tax us oppressively? Did you
not terrorize us day and night with your diabolical Inquisition? Let me
make this matter perfectly clear to all present: I will not allow the
voice of Israel to be stilled on this day.”

On March 31, the Edict of Expulsion was signed. Every Jew was forced to
choose between conversion to Christianity or leaving the country
forever without their possessions. As a final insult, the date of
departure was to coincide with Tisha B'Av, day of mourning to
commemorate the many tragedies that have befallen the Jewish people. A
day of fast, the destruction of both Temples (the first by the
Babylonians in 586 BCE and the second by the Romans in 70 CE) is
recorded on that day.

Luis de Santange, a Converso and accountant to the Royal Court, offered
Abrabanel the financing of 17,000 ducats to find a new home for the
expelled Jewish communities. Abrabanel recruited Abraham Zacuto, the
physician for King John II. Like Abrabanel, Abraham was also an
astronomer and a mathematician; he had developed the "Almanac
Perpetuum," and included the Tables of Navigation in his native tongue
– Hebrew. It was through King John II, that Abraham was introduced to
Admiral Salvador Fernando.

Son of Dom Fernando, First Duke of Beja, Salvador who had a love affair
with Isabel Goncalves Zarco, daughter of Joao Goncalves Zarco,
discoverer of Porto Santo and Madeira. The Zarcos were Portuguese Jews
who came from the city of Tomar. When a women became pregnant out of
wedlock, she was often secreted away to another locality to give birth
to her illegitimate child. For this reason, Salvador Fernando Zarco was
born in Cuba, a small town eight miles north of Beja. The couple had
one son, Diego.

The power of the Ottomans and other Islamic nations of the eastern
Mediterranean was growing at an alarming pace, continually threatening
the Christian monarchies themselves. This power had also effectively
closed the land routes to the East, via the Caspian Sea, Samarkand, and
northern India, and made the sea route south from the Red Sea extremely
hard to access.

A first cousin to King John II, Zarco was half-brother to Queen Dona
Leonor, half-brother of King Manuel I, and grandnephew of Prince Henry
the Navigator. The King arranged for Zarco’s baptism, and as a
Converso, was sent on a secret mission to divert Spain's attention from
the real sea route to India by sailing west, giving time for Prince
Henry's navigators to go beyond the Cape of Storms, which was later
renamed the Cape of Good Hope. He spent seven years in Spain trying to
convince the Spanish royalty to approve a western route to India, each
time being turned down.

At a more elevated level still, Franciscan preachers sought to prepare
for the end of the world, as they interpreted the Book of Revelations
to prophesy. According to the eschatological vision contained in
Revelations, Jerusalem would be recaptured by Christendom and a
Christian emperor installed in the Holy Land. These events were a
precondition for the coming, and defeat, of Antichrist and the
conversion of the whole human race and, ultimately, for the Last
Judgment.

With the Edict of Expulsion signed, Luis de Santangel, keeper of the
royal purse, urged the Crown to approve the expedition in "an
enterprise of so little risk, yet which could prove of so great service
to God...to speak of very great increase and glory for her realms and
crown..." Luis pleaded the westward project would, it was hoped, help
to finance a crusade to the East. He suggested the possibility of
linking with Christians such as Prester John, a legendary Christian
ruler of the East, and his descendants, who, it was thought by many,
still survived east of the lands of the infidel.

The Great Khan of the Golden Horde was himself held to be interested in
Christianity. Luis made the case that the Kingdom could use the journey
to personally deliver a letter of friendship from his sovereigns to the
Great Khan on their journey. Finally, the Queen relented, and summoned
the Admiral who would never take “no” for an answer to return to the
Spanish court and lay out his plan again.

In his final presentation to the Queen, Zarco announced, “Your
Highnesses, as Catholic Christians... took thought to send me to the
said parts of India, to see those princes and peoples and lands... and
the manner which should be used to bring about their conversion to our
holy faith, and ordained that I should not go by land to the eastward,
by which way it was the custom to go, but by way of the west, by which
down to this day we do not know certainly that anyone has passed;
therefore, having driven out all the Jews from your realms and
lordships... I should go to the said parts of India, and for this
accorded me great rewards and ennobled me so that from that time
henceforth I might style myself "Don" and be high admiral of the Ocean
Sea and perpetual Governor of the islands and continent which I should
discover... and that my eldest son should succeed to the same position,
and so on from generation to generation.”

Despite their shock at hearing of his demands to be appointed "Admiral
of the Ocean Sea, Viceroy and Governor of the said islands and
mainland," and the astonishment of the country, surrounding Kingdoms,
and the Pope himself, the documents were signed. For a signature, Zarco
always used a unique triangular monogram similar to inscriptions found
on gravestones of Jewish cemeteries in Spain and South France. This
Kabbalistic siglum, in Hebrew, Latin, and Greek, contains two secret
names: Cristobal Colon, his "nom de plume," and Salvador Fernando
Zarco, his birth name.

On the 9th of Av, August 3, 1492, Christopher Columbus, as his Converso
name is now recorded, departed Palos, Spain at the command of three
ships and 90 men, nearly all of his crew Conversos. He carried with him
Abraham Zacuto’s Table of Navigation and a book of charts from Isaac
Abrabanel. His vessels reached the Canary Islands on August 9th and
departed out into the unknown of the Atlantic on September 8th. None of
Columbus' crew had ever sailed over 300 miles from Europe, but by
October 12th, covering over 3000, they sighted landed in the Island
which Columbus named San Salvador. On October 29th, he reached Cuba,
naming it after his birthplace.

Columbus’ official report of his first voyage to Ferdinand and Isabella
began with the following words: "And thus, having expelled all the Jews
from all your kingdoms and dominions...;" a very strange beginning
statement for an Admiral returning from a remarkable, supposedly
impossible voyage. Even following three subsequent voyages across the
Atlantic, Columbus declined to admit that he had not found the true
Indies and Cathay which he had searched for. Columbus died refusing to
accept that he had discovered a brand new world in the Caribbean.

It is ironic, however, that Ferdinand and Isabella’s attempt to rid the
Jews from Spain, ultimately resulted in a new homeland for them called
America, a refuge for more Jewish people than anywhere else on Earth.
In fact, today the population of Jews living in New York City is
greater than in all of Europe combined. As an expert sailor, navigator,
and cartographer, and indeed a Kabbalist, who understood the secrets of
heavenly bodies, perhaps Salvador Fernando Zarco knew exactly where he
was going.

Ephraim ben Laibl produces the Tovia Singer Show for Israel National
Radio, and various programs weekly on Paltalk Radio (www.paltalkradio.com).
He serves at CTO for Pirchei Shoshanim's Shulchan Aruch Learning
Project, and is the Director of the Internet Virtual Yeshiva (www.virtualyeshiva.com)
and International counter-missionary organization, The Messiah Truth
Project (www.messiahtruth.com).